2956: Lloyd's Lab Accelerator and Firebreak Risk: A New Era in InsurTech

[00:00:01] I've recently spent a little time in the US and I was horrified by the weather that I see on the news there. There's a lot of talk of a heat dome and temperatures of 120 Fahrenheit almost being the norm and over a hundred in a lot of areas in

[00:00:15] the East Coast where you don't imagine temperatures like that or certainly I don't think of temperatures like that here in the UK and as a result we are seeing an increase in wildfires and everywhere from Greece to Australia to

[00:00:28] the US especially in California and these wildfires are increasingly threatening the homes and livelihoods of everyday people like you and I all around the world so I found myself wondering recently how is the insurance industry keeping pace with these escalating risks? So today on Tech Talks

[00:00:48] Daily I'm joined by two pioneers at the intersection of both technology and insurance. Quite a unique interview this one because I have Rosie Donay, head of the Lloyds Lab Accelerator and Kate Stilwell co-founder of a company called

[00:01:06] Firebreak Risk. Both hugely successful in their own right but together they're driving significant innovations in how we manage and mitigate the risk of wildfires and Firebreak Risk harnesses artificial intelligence to transform user submitted photos and videos into valuable underwriting data directly

[00:01:27] linking homeowners mitigation efforts to insurance eligibility and pricing. So the big question I'm left with here is how is Lloyds Lab Accelerator facilitating such transformative solutions and how are Firebreak Risk leveraging technology to make a difference? Well buckle up and hold on tight because today I'm going to

[00:01:48] beam your ears all the way to the UK and California simultaneously but see as we're talking to both sides of the pond maybe I should say simultaneously as well. Bringing you daily tech insights requires significant time and resources

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[00:02:54] moderate authorized so step into the future of secure managed file transfer with Kiteworks by visiting kiteworks.com to get started that's kiteworks.com to get started but enough rambling from me let's get today's guest on. So without further ado let's get Rosie and Kate onto the

[00:03:13] podcast today to talk about the power of technology and innovation when it comes to adapting to the realities of climate change and what this means to the insurance sector. So a massive warm welcome to the show I've got not one but

[00:03:28] two great guests joining me on the podcast today Kate could you begin by telling everyone listening a little about who you are and what you do. Thank You Neil my name is Kate Stillwell and I'm an insure tech entrepreneur and I am

[00:03:41] co-founder of Firebreak Risk and previously a founder of Jumpstart Insurance and Firebreak went through the Lloyd's Lab this time last year. Fantastic well welcome to the show and Rosie would you mind telling everyone listening a little about you too. Fantastic thanks Neil absolutely so I'm

[00:03:59] Rosie Dene and I run the Lloyd's Lab accelerator program and so I had a 10 year career in insurance before coming to innovation and insurance and honestly I haven't been happier since I found innovation it has transformed my

[00:04:15] life and I turn up to work with a mask smile on my face every day. Well big warm welcome we've said a few times already we've mentioned the Lloyd's Lab accelerator we'll have people listening all around the world hearing about it

[00:04:28] for the first time so would you mind explaining the role of Lloyd's Lab accelerator in fostering things like innovation within the insurance industry there is a huge insure tech space at the moment and also how it

[00:04:39] supports startups like Firebreak Risk. Absolutely I think I might just take a step back because Lloyd's Lab is part of Lloyd's Market and I think it's really useful to kind of contextualize where we sit in this weird and wonderful world of

[00:04:53] insurance so the Lloyd's Market is a face-to-face marketplace which still exists today it's rare to find them but what we do is we have 50 different insurance companies operating within our marketplace and over 300 brokers so it's a huge community of insurers and insurance folks working within this

[00:05:15] Lloyd's platform. The lab is here to support the innovation efforts of everyone who works in the Lloyd's platform so through the lab companies can get access to those 50 different insurance companies and over 300 brokers. So the role of the Lloyd's Lab accelerator is to basically bring in really interesting

[00:05:36] ideas with you know extremely talented individuals who sit perhaps outside of the insurance industry and help them get into the insurance industry and create new products alongside the Lloyd's Market so we have the accelerator program which

[00:05:52] is one of many programs which is designed to do this and ultimately what we do is we partner the companies who come through the lab program with mentors so these mentors are experts in insurance and so they can really bring

[00:06:07] deep knowledge of insurance to the startup as I mentioned most of our startups don't have an insurance background and through this kind of awesome partnership we are seeing new products and new functionality being built out for the Lloyd's Market. So it's a method which works we

[00:06:25] have an 85% successful commercial rate so 85% of companies who've gone through the Lloyd's Lab have commercial relationships with the Lloyd's Market afterwards. And as I said a few moments ago Lloyd's Lab accelerator fostering innovation within the insurance industry and supporting startups like Firebreak Risk

[00:06:45] so I'd love to bring Kate in here. Kate what's your story what inspired you to create Firebreak Risk and what are the primary goals that your company aimed to achieve in mitigating wildfire risk? I feel there's got to be a bit of a story

[00:06:57] there too. Oh thank you yeah so I am sitting I'm joining you from Berkeley California and yesterday morning I woke up and there was a layer of black soot along the horizon that I could see I thought ah that is a wildfire season has

[00:07:15] begun early this year many people think of it as starting July 1st but wildfires are almost a year-round possibility now in the United States North America and West and sure enough there is a there are a handful of fires in California

[00:07:31] happening right now. And it's become sort of the new normal that folks are that folks are getting used to. So my co-founder Tak Leung owns a home in Truckee California which is near Lake Tahoe and he has been spending the last

[00:07:47] five years clearing trees and he likes to tell the story about how five years ago when he started cutting down trees around his property his neighbor said what are you doing? He say I'm making defensible space and they're like okay

[00:08:01] good luck with that and then after 2020 the there was a big fire season his neighbors started doing the same and so by that time his neighbors say oh hey Tak clearing more defensible space we're right there with you. And yet all

[00:08:17] this good work that neighbors in fire prone regions are doing to make their to stand and defend their properties are not yet being incorporated into insurance eligibility and insurance pricing and so there are regulatory movements to help ease that and Firebreak is trying to create this

[00:08:39] connection to link the conscientious actions that folks are taking to their to their insurance because they are actively reducing their risk and becoming a partner with the insurer in making sure that the probability of burning down is reduced. Because last thing there is scientific research that

[00:09:01] shows that if you have home hardening and defensible space you are 40% more likely to survive so that's actually a real probability that can go into the insurance pricing and we're trying to make that connection with Firebreak. And

[00:09:17] in the last few weeks I've spent a fair amount of time in the US and I've seen there's some crazy temperatures right now with the heat dome and stuff so I would imagine things are getting much worse at the moment as the it's quite

[00:09:28] literally hotting up and I'm curious though because I always try to get everybody thinking on this podcast about areas that technology can improve that you don't associate with technology so a question I've got to ask is how does Firebreak risks technology enable users to self-inspect and mitigate their

[00:09:45] properties while at fire risk and what makes your approach unique from maybe other solutions out there? Okay thanks Neil I'm gonna take that question in two parts so first how it works how the technology it works so the homeowner is

[00:09:59] prompted by their insurance company to download the app then use the app to take photos and videos walk around their home to self-inspect and document the condition of their home and the app prompts them through a series of

[00:10:10] questions then Firebreak takes those photos and videos those images and uses AI a combination of proprietary AI and off-the-shelf AI to convert those images into a data stream that is useful for underwriting in the meantime we also

[00:10:29] immediately provide back to the homeowner the top actions they can take to reduce their wildfire risk and I'll give you examples of those in a second but on the data side we have the pipelines that fit into the insurance

[00:10:43] underwriter system so then there's a bigger feedback loop that makes the underwriting the insurance available and facilitates the underwriting process so the inner feedback loop is take these actions and reduce your risk and then the bigger loop is here you're eligible for underwriting now in terms of like

[00:11:00] what makes us unique so there's no end of advice out there on the ways to harden your home and clear defensible space many of them are long long lists and they're very they're just like facing the wall the cut the customer looks at them

[00:11:16] and says I can't do all these things just give me one step at a time because once somebody does one step then they're able to they'll be ready psychologically ready to take the next step and the second thing that we do

[00:11:27] that's unique is making it connected to insurance so there are apps out there that's for example fire inspectors come around the neighborhoods and use their own apps to take in photos and videos and then they connect that to the advice

[00:11:43] they give to the residents to make the fire safe community but in terms of connecting those actions those mitigation actions to insurance eligibility is also part of what makes firebreak unique so the actions are as

[00:11:56] simple as we notice that there is a that you have a propane a can of propane under your wooden deck why don't you move that out to the non combustible shed that's at the edge of your property oh we noticed that you have a stack of dry

[00:12:14] firewood again under your deck right up against the house so what these do is they become an ignition source that then can cause a fuse that then will light the house on fire so whereas the common wisdom from insurance point of view is

[00:12:27] okay the roofs have to be the class A fire rated roofs well actually the that is but it's true that the roofs make big difference on the combustibility the but if you have a fuse just sitting there a can of gasoline or propane right

[00:12:45] under the deck why don't that's sort of low-hanging fruit so to speak to make the risk a little bit lower and I just love what you're doing with technology there and really making a difference with it and Rosie I've got to ask what

[00:12:57] criteria do you have at Lloyds lab to select startups for your accelerator program and what was it that stood out about firebreak risk so we have purposely made it really broad because we really want to have the weird the

[00:13:12] wonderful and the wacky come to our lab you know it's all about these amazing ideas and amazing uses of technology which are probably not being used in the insurance so it's very very straightforward we score we have a

[00:13:25] number of different stages we score against the same three things at every stage program product and team so team we want to make sure that the team being put forward to come to the lab is relevant it's not just kind of business

[00:13:40] development and that the whole team has the relevant skill set to do what they say can they can do quite often we have a number of academics so you know if you're doing something related to weather or floods you know we just want

[00:13:54] to make sure you've got the right brains behind it product it's relevant for the Lloyds market so as I've mentioned it's really broad in the sense that we want to invite companies who haven't perhaps thought about insurance as one of those

[00:14:06] who have but we are a commercial specialty insurance home so what that means is we're ensuring like the big kind of spaceships of these worlds big fleets of ships big properties it's not your pet insurance it's not your health

[00:14:20] insurance it's not your homeowners insurance necessarily it's more the kind of big big commercial insurance and program we want to make sure that your 10 weeks are going to be busy building out something new this program is a

[00:14:35] really unique opportunity to proof that you prove that you've got a kind of use case and insurance and actually start building out products which the market will want to use so those 10 weeks are there for you to really better

[00:14:49] your product so when it came to selecting firebreak it was such an interesting way of looking at an everyday issue risk mitigation is key in insurance we can do so much through risk mitigation and you know the concept

[00:15:04] is simple but it is so effective it's giving the power to the homeowners to actually empower them to make their risk and their home a better risk and also giving that in additional information to your insurers so that they can then

[00:15:20] price accordingly it's these are definitely the way that we're seeing insurance going when it comes to these sorts of things and well fire is really real you can't avoid it you know you open the newspaper on any given day and

[00:15:34] there will be a wildfire happening somewhere in the world so these are the risks that we as the Lloyds market need to look to improve to make sure that the right people can get insurance and just to bring to life what we're talking

[00:15:48] about here and help everyone listening all around the world the scale of the problem that you're tackling together and the impact of the technology Kate are you able to share any success stories or maybe a case study where firebreak risks

[00:16:01] solutions have been able to significantly reduce wildfire damage or the spread of wildfire is anything you can share around them yeah let me share the fact that not only the California regulator their Carta Lara and several

[00:16:19] California state senators have met with us in actually in Lloyds building during a delegation of trying to fix the problem but also the Colorado regulator and regulatory representatives from the state of Arizona have reached out to us

[00:16:36] proactively to help them set standards of how is this problem going to be solved and when I say this problem what I'm saying is that in case your listeners are not aware the there's a mass withdrawal of brand-name insurers

[00:16:52] from North American West and so this is leaving hundreds of thousands of people per year without insurance and even though Rosie explained that Lloyds primarily writes commercial property insurance commercial insurance the reason that Lloyds is so central to solving this problem this wildfire exposure

[00:17:11] problem is that as the brand name insurers withdraw there is an opportunity for specialty insurers and of which Lloyds marketplace is a collection of specialty insurers to come in and help solve the problem help create solutions to provide a stopgap and potentially a long-term solution to this

[00:17:30] extreme risk that is not understandable because one of the things that Lloyds does and the reason that firebreak sought out Lloyds is that they ensure what's uninsurable and the brand name insurers are pulling out of wildfire

[00:17:43] because they find it to be uninsurable the uncertainty is just extreme as the climate is changing and the weather patterns are so unpredictable and so this is a phenomenon that's affecting not just North American West but

[00:18:01] Australia parts of Europe and so the opportunity to come in and provide financial backstop in the form of insurance where it's right now it's being pulled out this is a hundred and sixty billion dollar problem just in

[00:18:16] North America and Lloyds has this opportunity to help come in and save the day. Love that as you said it affects every corner of the world and from an insure tech side of things and the insurance industry as a whole Rosie how

[00:18:31] do innovations like Fiber 8 risk solutions how do they contribute to the agility and effectiveness of the insurance industry in responding to wildfire events because I would imagine you have a slightly different vantage point on this. So I think the fact that these companies like fire breaks

[00:18:48] firebreak are smaller it means that they're more nimble they are actually able to really react to the end clients issue in a really really robust and agile way I think you know as insurance companies we tend to have a load of

[00:19:03] legacy that we have to work with or the insurance companies in the market and they want to support and serve their clients but actually sometimes using a company like fire break is by far the best way it is accessing the expertise

[00:19:17] that a company like fire break can bring to the to the problem but quite often you'll find founders having lived and experienced some of the issues that they would like to solve as Kate mentioned her co-founder has lived and experienced

[00:19:32] it so they really know what a positive solution looks and feels like and they can bring that to the actual solution that they bring to market in the same way that perhaps you know an insurance company as we sit here in London don't

[00:19:47] have that kind of insight and Intel so I think you know with anything when it comes to innovation is thinking and understanding the customers issue and then creating the product around it and I think the insure tech community is

[00:20:01] fantastic at doing that and that's where incumbents and insurance companies should be leveraging their expertise. And as you said a few moments ago Kate wildfires are a global problem from Greece to Australia and where you are at

[00:20:16] the moment in California so I've got to ask what are the or some of the biggest challenges that you faced in implementing wildfire mitigation technologies have you noticed any resistance are there any big hurdles or

[00:20:28] challenges that need to overcome and and how have you indeed overcome them? Yeah I would say that one of the biggest challenges has been a twofold here one is educating the insurance industry and in terms of what is the biggest

[00:20:45] opportunity so it's tempting for an insurance executive sitting in London to say oh wildfire that's a California problem and see the opportunity hypothetically but to think that to not fully grasp what the actionable steps

[00:21:08] are to be able to take advantage of that opportunity and so being able to say actually when the when the homeowners do these five things it has a measurable effect on your bottom line. So being able to communicate in plain terms what the

[00:21:25] profitable opportunity is not just for the profitability of the insurance executive but also the opportunity to fulfill the social good of insurance industry by getting more people covered and therefore more people the the economic stimulus they need and the protection that they need. So the second

[00:21:43] big challenge I would say is on the other side on the customer side not convincing them that they need to do something everybody wants better coverage everybody wants to do the right thing but understanding what they're what they

[00:21:59] will do and so having this a continuous iterative feedback loop with the customers of knowing okay what action did you take what will you take and for that we've implemented a feature in the app that's kind of like gamifying like

[00:22:13] having the customers tell us okay these are the what are you what are you gonna do out of these top five things what are you what are you committing to do and then checking back with them have you done them and then leveling up their

[00:22:25] their their the actions that they take in order to you know keep them motivated to to be engaged and reduce their risk. Well I absolutely love how Lloyd's Lab and Fibrate Risk complement each other in solving real problems here and if as we

[00:22:45] look forward there's so many different emerging technologies from AI being the big buzzword quantum computing and so many other opportunities so what would you say are the next steps for both Lloyd's Lab and Fibrate Risk in continuing to innovate adapt and evolve and address this increasing global

[00:23:02] concern of wildfires because it feels like there's a lot of room for opportunity here right now. I'll jump in first and say that the technology that we're leveraging is not unique to wildfires per se it's applicable to any

[00:23:17] climate risk or non climate risk that has a lot of uncertainty first of all and that second of all has where the risk mitigation plays a significant role in reducing the likelihood of a total loss and so climate risks for sure

[00:23:34] flooding, hail, ice and and I think that the opportunity to leverage the use of AI and the use of this feedback loop with the customers to to incentivize risk control has applicability to all sorts of insurance and insurance products.

[00:23:54] Absolutely and I think you know as Lloyd's Lab and we're here to serve a huge insurance marketplace you know our role is making sure we're getting the right companies in to accelerate their growth and also educate our market so Fibrate

[00:24:09] isn't the only fire solution that we've had come through the lab we've had a number of solutions looking at risk modeling and actually really understanding the kind of the new forms of data out there and this is where AI

[00:24:22] is so powerful kind of really understanding the kind of risk on the ground and providing this data to underwriters so you know a huge piece is education and also letting the underwriters know what we could do and

[00:24:36] how we can best serve them so we as a lab are here to serve any class or business so any sort of different insurance product so it's not just specific to fire but we're doing this across the board and all insurances that

[00:24:50] we we offer as Lloyd's. Well as I said a few moments ago I just simply love how Fibrate, Risk and Lloyd's Lab are complementing each other and leveraging technology to make a real difference in reducing wildfire there but

[00:25:06] although this is a tech podcast I also love finding out a little bit more about the origin story of my guests what's driven them because none of us are able to achieve any degree of success without a little help along the way and

[00:25:18] very often that could be someone that has helped us get us where we are today or maybe just invested a little time and isn't what is it in that right direction so I'm gonna ask this question to both of you is there a particular person or

[00:25:31] people that you're grateful towards who help you get you where you want put you on this journey that you're both on and Rosie I'll ask you first. I think mine isn't a straightforward answer but it's gonna be an honest one I was in the

[00:25:43] insurance market for 10 years I was broking and I was actually really frustrated about the lack of innovation and forward-thinking I was surrounded by and I really just wanted to do something different so I ended up basically kind of putting myself forward for a few kind of additional

[00:26:01] things which weren't in my daily job and I ended up setting up a diversity equality and inclusion network with a someone I met through insurance and through that network I actually ended up being put forward for this role at the

[00:26:18] Lloyd's Lab and it was pure coincidence and you know at that time I was even questioning whether I want to stay in insurance and if it wasn't for this person I had connected through some additional work I was doing outside of

[00:26:30] my day job you know I think I would be doing something totally different but now I absolutely love my job and it was a it was a complete crossroads and I didn't realize I was at a crossroads that here I am so I'm incredibly

[00:26:43] thankful to her. Love that, what a great story and it reminds me of the Steve Jobs quote you can't join up the dots looking forward it's not until you look backwards and see how it all joined together there and Kate anything from you there

[00:26:57] anything that lit the spark or somebody that lit the spark and helped you along the way anyone you'd like to give a shout out to? Yeah I'm gonna give a shout out to a mentor from a long time ago because it connects to my origin story

[00:27:10] of how I got to insurance. My first career was as a structural engineer so designing buildings to be safe in earthquakes and so I have a little bit of knowledge about earthquakes a lot of knowledge about earthquakes and a little

[00:27:27] bit of knowledge of every other climate risk and then how those risks get evaluated from an engineering actuarial mindset and what really started me thinking from the bigger picture from individual buildings to the broad

[00:27:40] economy was an old mentor, prior mentor not too old, Chris Poland. He is a previous CEO of a structural engineering company that I worked for called Dagen Kolb engineers but his work that inspired me was on a committee of SPUR, SPUR is

[00:27:58] San Francisco Bay Area Urban Research and Planning Association and they produced this seminal document called safe enough to stay and it looked at disasters in general and earthquakes in particular and what is it what do people

[00:28:15] need in order to recover and when we think about tech this being a tech podcast, tech is only is useful in the context of it being a product for people and if people can't live their lives then tech only has utility in order to

[00:28:31] help people live their lives and be the best person they can be and after a big natural disaster how can we all be the best people we can be and and recover and one of the things we need is safe homes but another that's only the the center

[00:28:46] of a ripple effect where we need communities, we need economies and so how do we think bigger, bigger than just ourselves, bigger than just our local communities but for our entire region and our entire economy to get that

[00:29:00] recovering after a natural disaster, how do we put tech in the service of spurring recovery, jump-starting recovery for the whole economy after a very major crisis and so that is really the the guiding light that has directed

[00:29:17] me in the next phases of my career. Wow, that's a powerful moment to end on absolutely love that and for anybody listening Kate, I would love to dig a little bit deeper on what you do at Firebreak RISP, maybe reach out to you or

[00:29:31] your team or just find out more information about the work that you're doing there. What is the best starting point for everything? You know certainly go to the website firebreakrisp.com, absolutely reach out to me on LinkedIn

[00:29:42] that's the most reliable way to reach me, I'm very easy to find Kate still well and I look forward to connecting. And Rosie we will have people listening all around the world, maybe a few startup founders as well that may be inspired

[00:29:55] by today's conversation, I'd love to appear on your radar. There's a few things they should do to get on there and a few things they shouldn't. Any advice on that and where should they find out more information about doing just that?

[00:30:06] Absolutely so we actually have applications open for cohort 13 of the accelerator program at the moment so do find us Lloyds.com, LloydsLab, or equally find me on LinkedIn, Rosie DeLay. It's a very difficult unusual surname but I'm

[00:30:22] sure it'll be written somewhere so do find me and we would love to have a conversation with you and maybe even see your application for our next cohort. And I would encourage anybody listening to do just that and check both of the

[00:30:35] both of you out and the great work that you're doing there. And in just 30 minutes today we've covered the significant impact innovations can have to mitigate wildfire risk and support the agility of insurance to these events, particularly delving into that cutting-edge work that both yourself at

[00:30:51] Lloyds and Firebreak Risk are doing in this space. And one powerful stat to end on I think is that homes mitigated from the impact of wildfires through initiatives like firebreaks are 40% less likely to burn down and I think it's a

[00:31:05] phenomenal stat and I love what you're doing with technology to improve that stat further but more than anything thank you to both of you for shining a light on this and bringing the subject to life. Thanks again.

[00:31:16] Thank you Neil. Thank you. Huge thank you to Rosie and Kate for joining me on the podcast today where we explored how critical innovation within the insurance industry can address and adapt to the growing challenges posed by climate risks like wildfires. And through LloydsLab Accelerator, startups like

[00:31:35] Firebreak Risk are not only redefining what risk assessment looks like but they're also empowering homeowners to take proactive steps that significantly increase their properties chances against wildfires. But what steps can we take to further harness technology and improving our resilience against natural

[00:31:55] disasters? Huge topic this one and how do you see other industries benefiting from similar innovations? And in the last three days alone I've spoken with Cisco, BT and LloydsLab and their accelerator there and one of the trends that I'm

[00:32:11] seeing is but all those three of those companies I've just mentioned have their own incubators. They're harnessing innovation and investing in startups almost like a startup within a huge enterprise and it's incredibly exciting some of the results we're seeing from this approach. So please share your

[00:32:28] thoughts with me as we continue to navigate the evolving landscape of global risks and technological solutions. Thoughts, questions, whatever it might be please DM me Twitter, Instagram, LinkedIn just Neil CQ's or send me an email techblogwriteroutlook.com but that is it for today this episode really was

[00:32:50] pure fire in a good way so thank you for listening as always and until next time don't be a stranger